U.S. consumer spending and income rose more than expected in March, while the core price index topped economists' expectations, according to the government’s report. In other reports that raised caution about inflation, manufacturing activity climbed in April and construction spending jumped to a record high in March.
In Monday's first report, the Commerce Department said consumer spending rose 0.6 percent in March as incomes jumped, although much of the gain was eroded by the pickup in inflation.
The price index for consumer spending shot up 0.4 percent, while the core price index closely watched by policy-makers at the Federal Reserve rose 0.3 percent.
The rise in inflation, along with the increase in manufacturing, was seen by bond investors as boosting odds of two more Fed interest-rate increases.
In a separate report, the Institute for Supply Management said its index of factory performance climbed to 57.3 last month from 55.2 in March. Little change had been expected.
According to the consumer spending report, personal income rose 0.5 percent in March.
Despite the 0.4 percent gain in the price index for personal spending in March, the year-on-year reading held steady at a 2.9 percent gain.